August 2008.

High Cost of Flying

Why is it so expensive to fly?  Every aircraft owner could answer that.   It used to be the cost of parts, repairs, government regulations, insurance, hangar fees and so on.  More recently, it’s the price of fuel that’s on everyone’s mind.

In North America, we’re paying close to $7.00/gallon, while in European and other countries, they’re being hosed for well over twice that.  Somehow, there are still planes in the air.

It’s remarkable too that small charter and training operations keep flying.  The regulations forced upon these guys by Transport Canada and the FAA are enough to choke the life out of anyone.  To run an air service, the operator requires permission from the government in the form of an Operating Certificate.  That “O.C.” outlines just about everything the guy needs to do from when he gets up in the morning until he goes to sleep at night, usually about 16 to 20 hours later.  He’s told where and when he can fly, who he can hire, what and how to train his employees, how much he can charge, what insurance to buy, how to outfit his aircraft, and faces so many other on-going and new regulations, it would be impossible to list them all in any single document.  It’s enough to make almost anyone throw up his arms and walk away from the mess.

Fortunately, there are those who have the stamina and the drive to push ahead to keep an air operation going, until he runs out of money anyway.  For the traveling public, that is a good thing.  The smaller operators in remote areas provide a service for which there is no alternative.  Several of the major  airlines are in trouble, some will fold, but we’ll never run out of ways to get around the world by air.

This is all worth thinking about because ultimately, the customer and the non-flying public have some control over the costs involved in flying.  For example, who do you think is responsible for most of the regulations that force up costs?  The government for sure, but it comes from people like a California woman, Kate Hanni, who is an advocate for airline passenger’s rights.  She has her case against American Airlines before a Federal judge in Oakland, because American left a planeload of passengers stranded on a tarmac in Austin, Texas, for nine hours in December 2006.  This woman formed the “Coalition for an Airline Passenger’s Rights” to take her case to the courts.

This group of people, numbering over 21,000 and growing, seems to be packing a big stick.  They’ve got several influential members of government on their side.  They circulate petitions and run active membership drives through websites.  They will undoubtedly succeed to some degree with their goals.  But at what cost, and more to the point … is this the right way to deal with the situation?

First of all, the incident that got the ball rolling was an American Airlines plane being diverted around dangerous thunderstorms.  They were sent to Austin, Texaswhere apparently gates and services were already stretched beyond limits.  Consequently, although safely on the ground, the airport and American were simply unable to accommodate the passengers with anything close to first-class service.  I can’t see where it’s much different from a driver in a Saskatchewan snowstorm being forced to spend the night at a farmer’s home.  He wouldn’t get a feather bed and four-course breakfast for sure, but he would be warm and safe.  You’d never hear of the traveler forming a coalition to force all prairie farmers to prepare their homes and accommodate unfortunates who are stranded by weather. 

It seems to me that the whole system could be cleaned up, the poor, inconsiderate, money-grabbing operators could be culled by the simple process of supply-and-demand, and the world would still be a happy place.  If American Airlines deliberately mistreated their customers on a regular basis, it wouldn’t be long before they had no customers to treat.  Meantime, it would open the door for an airline that could see the opportunity for their own good service to succeed.

Maybe this is all too simple.  What’s missing here?  What this Coalition for Airline Passenger’s Rights is attempting to do, is force even more regulations on the air service operators.  They want government to wade in and dictate rules, many of which would be beyond the control of the airline, such as assuring no plane sits on a tarmac for more than three hours without having a gate to dock at.  Isn’t that at least partly the responsibility of the airport?  Many delays come from the stuffed air traffic control system, a major problem that could be seeing breakthroughs with the next generation of air traffic control.

Their “bill of rights” goes on, demanding personnel immediately  available to move passengers from one area of a terminal to another, to ensure their baggage shows up when and where it’s supposed to, compensation of 150% of a ticket price for those who are bumped by postponed flights (for any reason).  There is a lot more, and you can see their website for details.

I may be cynical, but if we demand the government to come in and start enforcing even more regulations on all air operators, isn’t this ultimately going to push ticket prices up even more?  It doesn’t take a rocket scientist to figure it out.  The free market always has, and will continue to weed out the poor and greedy business operators.  The result of more and more regulation can only mean a higher and higher costs for all air operators and all customers.

If American Airlines is truly negligent and greedy, or is just inefficient and needs a business plan overhaul, then it will ultimately face the market and make the changes needed.  Or, it will simply disappear.  Adding more regulations will eventually ensure the demise of all air operators.

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